Wall Street Journal's Brawl Vs. New York Times Heats Up Over Advertisers

NEW YORK (AdAge.com) — How much of a threat does The Wall Street Journal’s New York metro section, still unconfirmed but now expected this April, pose to The New York Times?

The Journal’s play for new readers and advertisers in the New York area won’t be an automatic success, but there are plenty of reasons for the Times to be concerned. They start with Bloomingdale’s and Bergdorf Goodman.

The retailers will each advertise in the Journal’s New York section from the get-go, people close to the situation said. Both traditionally spend far more in the Times than in the Journal: Bloomingdale’s, for example, spent $17.9 million in the Times last year while devoting less than $1 million to the Journal, according to estimates from Kantar Media.

Bloomingdale’s operates stores around the country, and the Times has a healthy national distribution — so it’s not clear that it’s just the paper’s strong city distribution feeding that disparity. But Bloomies also has many stores concentrated in the New York area, so when it’s time to advertise in that particular region, which it does, the Journal’s Metro section may give the chain a reason to reexamine its allocation of spending.

Bloomingdale’s executives declined to comment.

New option
The Bergdorf executive who could discuss its advertising was not available on deadline, but you can draw some reasonable inferences about what a Wall Street Journal metro section could do for it. Bergdorf has no stores outside New York; it spent about $1.4 million in the Times last year and apparently nothing in the Journal, according to Kantar.

The Times has long sold ads that appear only in the metro area or in even narrower segments within it, while the Journal hasn’t been able to offer anything more tightly focused on New York than a buy across all of New England. The Journal metro section offers a new option for marketers that focus on New York.

And unfortunately for the Times, none of the advertisers in that situation will find new money to shower on the Journal’s new offering, said Alan Mutter, the independent industry analyst who blogs at Reflections of a Newsosaur. The Journal’s new section will just give advertisers a new place to consider spending money that once went to the Times.

What’s more, Rupert Murdoch’s Journal will probably go after those advertisers pretty fiercely. Insiders expect the paper to eventually hire a sales staff for the metro team.

“Who knows what lengths The Journal might go to, to capture some New York Times business?” Mr. Mutter said. “My guess is that this is a significant business investment and that therefore they will be significantly aggressive.”

A spokesman at the Journal declined to comment or even confirm the coming metro section.

Differentiating factors
The Times, of course, has existing relationships and deals with many, many advertisers, not to mention a somewhat different audience and other differentiating factors — all of which means the Journal won’t be able to simply vacuum ads from its rival. “Obviously, they’re levelling the playing field so they’re becoming more competitive,” said Robin Steinberg, senior VP-director of print investment and activation at MediaVest Worldwide. “But I think it’s truly client-specific and based on clients’ objectives.”

The Times itself makes a similar argument. “The Times’ distinctive New York coverage — government, politics, the courts, fashion, styles, the arts, culture, education, business and more — commands a deeply loyal and engaged print and web audience in New York and is almost three times the size of the Journal’s,” said Scott Heekin-Canedy, president and general manager of The New York Times, in a statement. Paid print circulation, overall audience and readership among women, the self-employed and small-business owners are all much bigger for The Times in the New York area, he said. “Our advertisers know the difference and will continue to market to this engaged, outstanding audience.”

Certainly, not every advertiser or reader is going to make a switch. “We run about 35 full-page ads in the Times per year,” said Paul Bressler, website manager at 67 Wine & Sprits, a store on Columbus Avenue in Manhattan. “We don’t advertise in the Journal. The store owner dislikes the Journal’s editorial policy and dislikes Mr. Murdoch even more.”

New York University’s School of Continuing and Professional Studies, meanwhile, advertises more heavily in the Times than in the Journal, not just because it sometimes wants to target the New York metro area but also because of the nature of the coverage in The Times. “Content and context are the primary issues in terms of where the school places its advertising,” said Dorothy Durkin, associate dean for strategic development and marketing. “The Times seeks out stories and focuses its coverage on issues oriented to education. They usually have education editors, and they have a regular education supplement that we’re in. The Wall Street Journal will have a ways to go in terms of not just the geography and being a general newspaper, but in cultivating a sufficient concentration of readers who are interested in adult and professional education.”

But there will still be new options for many. Barnes & Noble regularly advertises its New York events in The New York Times, for example, but doesn’t consider the Journal sufficiently targeted to the city to use it for that purpose, a Barnes & Noble spokeswoman said. So it uses the Journal occasionally for corporate or product messages that are relevant to the Journal’s national readership.

But a Journal metro section might give Barnes & Noble some new options. “If The Wall Street Journal created a New York City metro section, we would evaluate it against our particular communication needs the way we would any other medium,” the spokeswoman said.

And don’t discount the readers in play, who are crucial not just for circulation revenue but for advertising revenue — which depends on the number of people who see each ad.

Better base in the city
The New York metro market is a major piece of the Times’ business. The Times gets about 41% of its paid circulation from the market around New York City, including parts of Connecticut, New Jersey and Pennsylvania, according to its most recent audit by the Audit Bureau of Circulations, which covered the 12 months ending last September.

The Journal’s audit for that period is still a work in progress, unfortunately, so it’s necessary to look at the audit covering the preceding year, the 12 months ending in September 2008, for a rough comparison. But the difference is still telling: The New York market that includes parts of Connecticut, New Jersey and Pennsylvania contributed only about 15% to the Journal’s paid circulation in that period.

That means the Times has a solid base and probably a great many loyalists that won’t be easy for the Journal to poach. But it also means the Times has something to lose, while the Journal is looking at tremendous opportunity.

The Journal’s metro section will include beat coverage of New York sports teams, culture reporting and dispatches on City Hall and Albany, according to people close to the situation. A reader who chose the Times because it includes local coverage could now theoretically choose the Journal instead. And if a Journal reader were buying the Times as well for its local coverage, come April she will have a bit more leeway to drop the Times.

“I don’t see it as a huge threat, but I suppose there are metro readers for whom the New York Times is a second read after the Journal,” said Rick Edmonds, media-business analyst at the Poynter Institute. “Subscribing to both is going to set you back $1,000 these days.”

“If you could cut that in half, you could buy a couple bagels at H&H for that kind of money,” said Mr. Mutter, the newspaper analyst. “It’s serious savings. And in these times, it’s not inconceivable that some people will say, ‘Gee, I don’t need both, especially since I can catch up online.'”